Hiring in China begins with two separate decisions.
First, is the person an employee or a genuinely independent service provider?
Second, if the person is an employee, which legal employer will hire them and what contract structure should be used?
Confusing these questions can lead to missing contracts, unpaid statutory benefits, worker-misclassification claims and unlawful termination.
The three models most commonly compared are:
Standard full-time employment
Statutory non-full-time employment
Independent service engagement
The first two create employment relationships. The third is a commercial arrangement and should not be used to disguise employment.
An Employer of Record is different again. It is a hiring structure through which a local entity employs the worker; it is not a separate category of worker.
Model 1: Standard Full-Time Employment
Standard employment is normally appropriate when the worker:
Performs an ongoing internal role
Reports to company management
Follows an established schedule
Uses company systems and processes
Receives a regular salary
Is subject to performance management
Is integrated into the organisation
Is expected to work over the long term
Under China’s Labor Contract Law, an employment relationship begins when the employer starts using the worker’s labour.
A written contract should be signed when employment begins. If it is not signed at that time, the law generally requires it within one month.
The official Labor Contract Law also provides that each party should retain a copy.
Employer responsibilities
The legal employer normally handles:
Employment contracts
Payroll
Individual income tax withholding
Social insurance
Housing fund where applicable
Working hours and overtime
Statutory leave
Employee records
Performance and discipline
Termination and severance
The exact contribution rates and procedures can vary by city.
A company with a suitable Chinese entity can employ workers directly. A foreign company without one may need a locally supported arrangement such as a China Employer of Record.
Three statutory contract terms
Standard employment should not be confused with one single contract duration. China’s Labor Contract Law recognises three principal contract terms.
Fixed-term contract
The employer and employee agree on a defined end date.
This structure is commonly used for initial hires, although expiry does not always allow the employer to end the relationship without procedure or financial consequences.
Repeated renewals can also create open-ended-contract obligations.
Open-ended contract
An open-ended contract has no predetermined end date.
It does not guarantee lifetime employment. The contract can still end under legally permitted circumstances, but the employer cannot rely on an ordinary expiry date.
An open-ended contract may become mandatory in circumstances including:
Ten consecutive years of service
Certain restructuring situations
Renewal after two consecutive fixed-term contracts, subject to statutory conditions
Failure to sign a written contract within one year after employment begins
Contract ending upon completion of a defined task
The parties agree that the contract will end when a specified piece of work is completed.
The project must be genuinely identifiable. Calling an ongoing position “project-based” does not necessarily make this contract suitable.
Businesses hiring for a defined assignment should review HROne’s project-based team solution.
When Full-Time Employment Is the Best Choice
Standard employment is normally the strongest fit for:
Sales managers
Engineers
Procurement specialists
Quality-control personnel
Account managers
Administrative staff
Operations employees
Long-term technical specialists
Managers with internal authority
It provides a clear structure for supervision, confidentiality, intellectual property and performance management.
The trade-off is a fuller set of employer obligations. Those obligations should be treated as part of the cost of hiring—not optional administrative extras.
Model 2: Statutory Non-Full-Time Employment
China’s statutory part-time category is formally described as non-full-time employment.
It has a narrower meaning than simply working fewer than normal hours.
Article 68 of the Labor Contract Law’s part-time provisions defines it as employment paid primarily by the hour where the worker generally works:
No more than four hours per day on average; and
No more than 24 hours per week for the same employer
If the actual arrangement regularly exceeds these limits, the employer should review whether it remains properly classified.
Special non-full-time rules
The statutory framework provides that:
The agreement may be oral
A probation period cannot be imposed
Either party may terminate by giving notice at any time
Statutory financial compensation is generally not required upon that termination
Hourly pay cannot be below the local hourly minimum wage
The payment cycle cannot exceed 15 days
The worker may have agreements with multiple employers, provided a later agreement does not prevent performance of an earlier one
Although an oral agreement is permitted, using a written agreement is generally more practical.
It can document:
Duties
Hourly rate
Expected schedule
Work location
Data and confidentiality requirements
Payment dates
Safety responsibilities
Termination process
When non-full-time employment may work
This model may suit:
Limited administrative support
Reception coverage
Hourly research assistance
Short daily support periods
Translation or coordination within defined hours
Genuine reduced-hours operational work
It is less appropriate when the person performs a core, ongoing role with employee-like availability.
For the statutory limits on hours, hourly pay, 15-day wage settlement and termination, see our guide to part-time employment in China. The hiring structure should be chosen only after checking the actual duties and schedule.
Model 3: Independent Service Engagement
An independent contractor is not an employee.
The relationship should be based on the delivery of services or defined results rather than the company’s ongoing control of an individual worker.
A more defensible contractor arrangement may involve a provider who:
Operates an independent business
Controls how and when services are delivered
Uses their own tools or resources
Works for multiple customers
Prices the service commercially
Bears genuine business risk
Is paid for deliverables rather than employee attendance
Is not managed through employee rules
Can provide substitutes where the contract allows
The written agreement should describe a commercial service—not an employment relationship with a different label.
Contractor Misclassification Risk
Risk increases when a purported contractor:
Works fixed company hours
Reports to an internal manager
Performs a permanent internal position
Uses the same processes as employees
Requires leave approval
Receives regular salary-like payments
Depends economically on one company
Is subject to disciplinary rules
Cannot control the method of work
Appears internally and externally as company staff
Chinese courts can examine the actual relationship rather than relying only on the agreement’s title.
The Supreme People’s Court has highlighted “dominant labor management” when considering whether a labor relationship exists. Its 2025 exemplary cases show that control and employment-related facts can outweigh contractual labels.
A contractor agreement therefore cannot guarantee contractor status.
Social Insurance Cannot Simply Be Waived
Formal employment normally brings social-insurance obligations.
The Supreme People’s Court confirmed in 2025 that agreements seeking to exclude statutory social-insurance contributions are invalid. See the court’s social-insurance clarification.
Paying an employee additional cash instead of making required contributions does not necessarily solve the obligation.
This reinforces the classification principle: if the relationship is employment in substance, the parties generally cannot use a contractor label or private waiver to remove statutory duties.
Where EOR Fits
A foreign business without a Chinese entity may identify a worker as a genuine employee but still lack the ability to hire that person directly.
An EOR can provide the local employing entity.
In a typical arrangement:
The EOR:
Signs the local employment contract
Runs payroll
Withholds IIT
Administers statutory benefits
Maintains employer records
Supports employment changes and termination
The client:
Selects the employee
Defines the role and compensation
Manages daily work
Supplies payroll information
Funds employment costs
Coordinates decisions with the EOR
The model is particularly useful for first hires, market testing, small teams and pre-opening periods.
Read the complete China EOR guide for the full responsibility split.
The underlying structure should always be reviewed. “EOR” is a commercial description and should not be assumed to override China’s rules governing employment or statutory labor dispatch.
Labor Dispatch Is a Separate Regulated Model
For the legal structure, limits and responsibilities, compare labor dispatch vs EOR in China.
Labor dispatch should not be confused automatically with recruitment, ordinary outsourcing or every EOR arrangement.
China’s Labor Contract Law provides specific rules for labor-dispatching units and receiving companies. It states that dispatched workers are generally used for temporary, auxiliary or substitute positions and are entitled to equal pay for equal work.
The statutory labor-dispatch provisions also allocate responsibilities between the dispatching unit and receiving company.
Any arrangement that may fall within these rules requires local legal review.
How to Choose the Right Model
Use this sequence before recruiting.
1. Define the actual role
Document the duties, reporting line, duration, schedule, location and expected level of control.
2. Decide whether the person is an employee
If the company will supervise an ongoing role as part of its workforce, employment is normally more consistent with the facts than independent contracting.
3. Test reduced-hours eligibility
If considering non-full-time employment, verify that the hours, payment cycle and working pattern meet the statutory definition.
4. Select the legal employer
Confirm whether an existing Chinese entity can employ the worker or whether an EOR or another reviewed structure is required.
5. Select the contract term
For standard employment, choose a fixed-term, open-ended or task-completion contract based on the legal and operational facts.
6. Build the onboarding file
Prepare the contract, employee information, payroll setup, tax details, statutory-benefit registrations, handbook acknowledgements and privacy notices.
Use HROne’s China employee onboarding guide for the complete process.
Hiring-Model Checklist
Before making an offer, confirm:
Is the role ongoing or deliverable-based?
Who controls the working method?
Who sets working hours?
Is the worker integrated into the organisation?
Will the person work fewer than the statutory part-time limits?
Does the company have a qualified local employer?
Which contract term fits?
How will payroll and IIT be handled?
Which statutory benefits apply?
Who controls performance and termination?
Does the arrangement require labor-dispatch review?
Do the contract and actual working practices match?
HROne’s China HR compliance guide explains how these decisions connect to payroll, leave, data and termination.
Final Takeaway
The right hiring model follows the actual working relationship.
Use standard employment for ongoing, supervised roles. Use statutory non-full-time employment only when the arrangement fits its specific hourly rules. Reserve independent contracting for genuinely independent commercial services.
If the person is an employee but the company lacks a Chinese entity, an EOR may provide the local employment structure.
HROne offers China recruitment services and employment support for businesses building local teams. Contact HROne to assess the role before making an offer.
This article provides general information and does not constitute legal advice. Worker classification and hiring structures should be reviewed according to the actual facts and applicable local rules.
Frequently Asked Questions
What are the main employment types in China?
Businesses commonly compare standard employment, statutory non-full-time employment and independent contracting. Independent contracting is a commercial service arrangement, not employment.
What are the three labor-contract terms?
The Labor Contract Law recognises fixed-term contracts, open-ended contracts and contracts ending when a defined task is completed.
How many hours can a statutory part-time employee work?
Generally no more than four hours per day on average and 24 hours per week for the same employer.
Can a company terminate a part-time employee without severance?
Under the statutory non-full-time rules, either party may generally terminate at any time, and the employer does not normally pay statutory financial compensation for that termination.
Can a foreign company hire a Chinese employee as a contractor?
It may engage a genuine independent provider. If the actual relationship looks like managed employment, misclassification risk can arise.
Is EOR a fourth employment type?
No. EOR is a hiring structure. The EOR’s local entity becomes the legal employer, while the client manages the employee’s business work.
